Bund yields head for steepest monthly drop since April turbulence

LONDON, Feb 27 (Reuters) - Germany's 10-year yield was set for its biggest monthly drop since April's tariff turmoil on Friday, as government bonds globally benefit from investor jitters about everything from artificial intelligence disruption to potential U.S. strikes on Iran.

The yield on the euro zone benchmark was a touch softer at 2.69% and was on course to finish the month roughly 15 bps lower. Bond yields move inversely to prices. DE10YT=RR

The drop reflects a combination of softer global risk sentiment and heightened geopolitical tensions. Talks between the U.S. and Iran over Tehran's nuclear program ended without a breakthrough on Thursday, although mediating country Oman said there were signs of progress.

European Central Bank President Christine Lagarde said earlier this week that policymakers expect inflation to settle near their 2% target in the medium term.

However, data released on Friday showed that French consumer prices rose more than expected in February, highlighting pockets of pressure.

Germany's 10-year yield was down around 1.5 bps before the data was released.

Lower German yields typically signal rising demand for safe-haven assets. The two-year yield DE2YT=RR, which is more sensitive to interest-rate expectations, was also a touch lower at 2.04%.